Redford is a seller of electric generators. He purchases a largequantity of generators from a manufacturer, Mallon Corp., by makinga down payment and signing an agreement to make the balance ofpayments over a period of time. The agreement gives Mallon Corp. asecurity interest in the generators and the proceeds. Mallon Corp.properly files a financing statement on its security interest.Redford receives the generators and immediately sells one of themto Garfield on an installment contract, with payment to be made intwelve equal installments. At the time of the sale, Garfield knowsof Mallon’s security interest. Two months later, Redford goes intodefault on his
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